The Story of Two Innovations That Shaped the Modern World

Nov. 15 has been a historically important day for three of the Dow Jones Industrial Average's (INDEX: ^DJI) components. Each company has built a significant part of its business -- in one case, virtually all of its business -- from the innovations revealed on this day.

Intel (Nasdaq: INTC) was founded in 1968, but it made its name, its fortune, and its future on Nov. 15, 1971. That was the day Intel first publicized its 4004 microprocessor in an issue of Electronic News, heralding "a new era of integrated electronics" led by the first chip to contain an entire central processing unit, or CPU. The 4004 was the first commercially available microprocessor, and it was an absolute computing breakthrough.

The 4004 was the result of an ambitious project Intel had been offered by the Nippon Calculating Machine Company, which needed custom chips for its Busicom printing calculator. The device originally called for 12 custom chips, but Intel countered with four chips, including a general-purpose control chip that could be reprogrammed for different tasks -- the first CPU. This epochal development earned its team, led by Federico Faggin, the National Medal of Technology and Innovation from President Obama in 2010.

Intel, whose founder also proposed Moore's Law, has since maintained an incredible pace of improvement from this first CPU, which has helped the company maintain its leadership role in the processor market for decades:

Specification

Intel 4004 (1971)

Intel Core 2 (2010)

Improvement

Clock speed

108 kilohertz

3.8 gigahertz

35,185 times faster

Transistors

2,300

1.16 billion

504,350 times more

Transistor size

10 micrometers

32 nanometers

313 times smaller

Source: Intel.

Intel's latest innovation, the 3-D (or tri-gate) transistor, is set to continue this impressive pace for another decade, at least. What's next? The power of the qubit, in the form of quantum computing, might be the processor's next great leap forward.

Getting in the gameMicrosoft (Nasdaq: MSFT) , Intel's longtime partner in the PC industry, took a step away from computers to stake its claim in the living room on Nov. 15, 2001, when it released the first Xbox. Microsoft's foray into an industry then dominated by the Sony (NYSE: SNE) PlayStation 2 and Nintendo's (NASDAQOTH: NTDOY) GameCube, which had been available in Japan for months and would hit American stores three days after the Xbox.

Microsoft remained committed to the Xbox in the face of huge losses. By the time Microsoft released the Xbox 360 in 2005, it had lost an estimated $4 billion "building the Xbox brand and business," in the words of former Microsoft Game Studios head Ed Fries. This huge cash sink had earned Microsoft only about 15% of the console market, roughly the same as Nintendo's share and far behind the PS2's colossal 70% slice of the pie. A decade after the first Xbox, Microsoft battled to a global tie with Sony in the console wars, with each claiming a 39% share to Nintendo's 22%. Microsoft's Xbox-led entertainment and devices division generated approximately $9 billion in revenue that year.

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A recipe for qualityWendy's (Nasdaq: WEN) got its start on Nov. 15, 1969, when founder Dave Thomas opened his first restaurant in Columbus, Ohio. From these humble beginnings, Thomas built Wendy's into a powerhouse with 6,600 locations doing more than $2.1 billion in total annual sales. Having long been the perennial third-place burger franchise behind leader McDonald's (NYSE: MCD) and Burger King Worldwide (NYSE: BKW) , Wendy's finally pushed past Burger King to become the No. 2 fast-food company on a U.S. sales basis last year.

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The best a brand can get Ever hear the phrase "razors and blades"? Probably about a million times, if you pay any attention to financial news. For most of human history, it was just "razor blades," because the only real way to shave was with a big, scary piece of extremely sharp metal that made going to the barber an act of supreme trust. King Camp Gillette changed that with his disposable razor patent, issued on Nov. 15, 1904.

Men everywhere could thereafter use one handle, throwing out old blades whenever they became dull. The steady stream of blade sales made Gillette an American success story and gave financial writers everywhere a lazy shorthand for "this company sells the same thing to the same people, over and over."

Just over a century after this patent, consumer products conglomerate Procter & Gamble (NYSE: PG) acquired Gillette for $57 billion -- the largest buyout in its history. When the buyout closed, the new P&G vaulted over Unilever (NYSE: UL) to become the world's largest consumer-products company.

Berkshire Hathaway (NYSE: BRK-B) CEO Warren Buffett is a big fan of razors and blades. At the time the acquisition was announced, he promised to amass a 100-million-share stake in P&G. It wasn't a big increase, as Berkshire already held 96 million Gillette shares at the time.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights.

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